LivePerson, Inc. LPSN
Starboard owns 9.7% of LivePerson and is running a proxy fight to reconstitute the board and unseat founder-CEO Rob LoCascio, arguing toxic culture and weak governance have driven chronic underperformance.
Thesis
Starboard Value owns approximately 9.7% of LivePerson, a conversational AI/chatbot company it believes has strong technology and customers but has chronically missed commitments under founder-CEO Rob LoCascio. The letter catalogs systemic corporate-culture failures evidenced by Glassdoor reviews calling the company 'a plane crash in slow motion,' the lowest CEO approval rating in the proxy peer group (14% below peer average), three CFOs and three heads of technology in five years, and a 2006 gender-discrimination lawsuit implicating current board member William Wesemann. Starboard also highlights ~$40 million of insider selling during 2020-2021 while management promised accelerating growth, a board with no lead independent director, 13-year average director tenure, and 14% female/underrepresented board representation versus a 30% peer average. Starboard filed preliminary proxy materials on April 20, 2022, nominating a director slate for the 2022 Annual Meeting to reconstitute the board and instill accountability.
SCQA
LivePerson is a publicly-traded conversational AI/chatbot company with strong underlying technology and a world-class customer base, led by founder and combined CEO/Board Chair Robert LoCascio.
Chronic strategy shifts, missed commitments, severe stock-price collapse, heavy executive turnover, a 2006 gender-discrimination lawsuit, and a toxic founder-first culture reveal entrenched governance failures on a board with no lead independent director.
Starboard filed preliminary proxy materials nominating a slate of qualified independent directors for the 2022 Annual Meeting to reconstitute the Board, separate the Chair role, and restore accountability.
The letter offers no explicit price target; Starboard argues reconstituting the Board is the critical first step toward unlocking long-term value after a ~70%-from-peak share-price decline.
The three reasons
- 1
Founder-CEO LoCascio has the lowest Glassdoor approval in the peer group; culture rewards loyalty over performance
- 2
Three CFOs, three tech heads, and four sales-leader changes in the past five years
- 3
Directors and officers sold ~$40M of stock in 2020-2021 as shares fell 70% from peak
Primary demands
- Reconstitute the Board with new, independent, highly qualified directors
- Elect Starboard's nominated director slate at the 2022 Annual Meeting
- Separate the combined CEO and Board Chair roles held by founder Rob LoCascio
- Appoint a lead independent director
- Increase Board diversity (gender and underrepresented communities)
- Improve accountability, governance practices, and refocus on core chatbot business
KPIs cited
Pattern membership
Composition what's on the 6 slides
Slide gallery ·
Notes
Six-page stockholder letter filed as DFAN14A exhibit during Starboard's proxy fight at LivePerson's 2022 Annual Meeting. Unusual for an activist letter in that the central argument is corporate culture and governance rather than financial/operational mispricing — heavily sourced from anonymous Glassdoor reviews (multiple long verbatim excerpts, 'plane crash in slow motion', 'wet noodles' board) and a 2006 gender-discrimination lawsuit (Cash v. LivePerson). Page 3 has an Executive Officer Turnover grid with photos of 3 CFOs, 3 CTOs, 3 sales heads. Page 4 has paired peer-gap bar charts on board diversity (14% vs 30%). Word-style body with institutional-quality embedded charts. Signed by Peter Feld, Managing Member. No valuation/price target in this letter; follow-up materials promised.